Ticketmaster is one of the largest ticket sales and distribution companies in the world. They sell tickets for various events including concerts, sports games, theater shows and more. One thing Ticketmaster is known for is their use of dynamic pricing for events. This means ticket prices can fluctuate leading up to the event based on demand.
What is dynamic pricing?
Dynamic pricing, also known as surge pricing or demand-based pricing, is a pricing strategy where prices change in real-time based on current market demands. Prices increase when demand goes up and decrease when demand goes down. Services like Uber and hotel booking sites commonly use dynamic pricing models. For event tickets, dynamic pricing allows the seller to adjust prices to find the optimal price point where they can maximize profitability and sales.
How does Ticketmaster use dynamic pricing?
For popular live events that are likely to sell out, Ticketmaster utilizes dynamic pricing to adjust ticket prices according to market demand. The goal is to price tickets at exactly what the market will bear to maximize revenue. As an event date gets closer and tickets start selling out, prices will naturally increase as fans compete for the dwindling number of seats. Conversely, if an event is not selling well, Ticketmaster may drop prices to try to boost sales.
Ticketmaster’s dynamic pricing system uses algorithms that incorporate a number of factors that estimate demand, including:
- Current ticket sales and rate of purchases
- Seat locations that are selling fastest
- Forecasted demand based on historical data
- Prices on secondary resale markets like StubHub
- Artist or team popularity and recent sales
- Day of week, season, and time remaining until event
The algorithm processes all this data in real-time to recommend price changes on remaining event tickets. Human employees at Ticketmaster also monitor sales activity and can override the algorithm’s pricing recommendations if needed.
When are prices adjusted?
Ticket prices on Ticketmaster can fluctuate at any time leading up to an event selling out. In general, expect to see more volatility in prices as demand picks up closer to the event date. It’s common to see several price adjustments in the last few weeks and days before a concert or game. Special factors like the announcement of a star player returning from injury or a new hit song from the headliner can also spark a rapid price hike.
| Time Before Event | Likelihood of Price Changes |
|---|---|
| 2-3 months out | Low |
| 1 month out | Moderate |
| 2 weeks out | High |
| Final week | Very high |
Are all tickets dynamically priced?
Not necessarily. While major concerts and sporting events typically use dynamic pricing, smaller events may rely solely on fixed pricing. There are also usually some ticket price tiers that remain static while others fluctuate.
For example, the very front row seats may be labeled “Platinum” tickets and always be priced at a premium level. Meanwhile, seats further back in the arena would be subject to dynamic pricing changes.
Benefits of dynamic pricing for Ticketmaster
There are several key financial benefits dynamic pricing provides Ticketmaster and event organizers:
- Maximizes revenue: By adjusting to market demand, dynamic pricing allows Ticketmaster to find the highest price customers are willing to pay leading up to an event.
- Sell more tickets: Lowering prices on low-demand events fills more seats that would otherwise go unsold if prices were fixed too high.
- Captures value: Big fans are often willing to pay more to get tickets to major events and hot shows. Dynamic pricing allows Ticketmaster to charge them premium prices.
- Discourages scalping: Secondary resellers often charge much higher prices for hot events. Dynamic pricing lessens demand for scalped tickets.
Criticisms of dynamic pricing
While dynamic pricing has clear financial advantages, some common criticisms of the practice include:
- Unfair to fans: Fans must constantly monitor prices to avoid overpaying and may get price gouged right before an event.
- Hurts budgeting: Fans can’t reliably budget for an event if prices are fluctuating.
- Rewards bots: Sophisticated reseller bots can snap up ticket inventory the moment prices drop.
- Price discrimination: Dynamic pricing may charge higher prices to dedicated fans simply because they are willing to pay more.
Deceptive pricing tactics
In addition to general criticisms of dynamic pricing models, Ticketmaster has also faced scrutiny for specific pricing tactics seen as deceiving to customers:
- Advertising ticket prices without mandatory fees that get added later in the checkout process.
- Using bait-and-switch tactics where certain tickets are advertised at lower prices but then turn out to not actually be available once fans try to purchase them.
- Releasing most tickets at once at lower initial prices, only to then raise prices drastically soon after.
How fans can save money on Ticketmaster tickets
Despite dynamic pricing making Ticketmaster tickets expensive, there are some tips fans can use to try securing seats at lower prices:
- Buy tickets as early as possible when prices are lowest.
- Use Ticketmaster presales to get tickets before general public on-sales.
- Purchase seats in slower-selling, less desirable locations.
- Avoid buying tickets just before or on the day of the event.
- Consider joining Ticketmaster’s Verified Fan program for earlier access.
- Buy in groups with ticket limits to avoid fees on each ticket.
While Ticketmaster’s use of variable and surge pricing has frustrated many consumers, it remains highly lucrative for the company. Fans can minimize the impacts of dynamic pricing by being flexible on seat locations and timing their ticket purchases strategically.
Conclusion
Dynamic pricing has become an integral part of Ticketmaster’s business model for major live events. By using algorithms to adjust prices in real-time based on estimated demand, Ticketmaster is able to maximize ticket revenue. Prices typically fluctuate more frequently in the final weeks leading up to an event as tickets sell out. While fans may dislike the unpredictability of dynamic ticket prices, the strategy does allow Ticketmaster to efficiently monetize high-demand events.
